Exclusive: BRICS nations monitoring 'complex' global markets - source

Published June 24, 2013

Reuters

BRASILIA – Major emerging-market economies are paying close attention to "new and complex" developments in global financial markets and want closer coordination of their macroeconomic policies, a diplomatic source briefed on the matter told Reuters on Monday.

Brazilian President Dilma Rousseff and her Chinese counterpart, Xi Jinping, discussed ways to strengthen policy coordination on Monday in a telephone conversation, said the official, who asked not to be identified.

Both countries, as well as their partners at the BRICS group which include Russia, India and South Africa, want G20 nations to move ahead with their commitments to safeguard global financial stability, the official said.

The official gave no details about any concrete action that could be taken, but the high-level talks signal that key developing nations are growing worried that an expected withdrawal of U.S. stimulus measures has caused investors to exit their markets.

Rousseff's office confirmed that she spoke with Xi, but declined to elaborate on their discussion.

Earlier in the day, a Brazilian newspaper reported that Rousseff planned to talk with Xi and Russian President Vladimir Putin to propose emerging market nations use their central banks to act jointly to mitigate the impact of a stronger U.S. dollar.

Expectations that the U.S. Federal Reserve will scale back its bond-buying program has dragged the Brazilian real to four-year lows, prompting the government to remove capital controls in a bid to bring more dollars into the economy.

The sharp depreciation of the real has raised worries about the risk to local companies with large debts in U.S. dollars. A weaker currency could also stoke already-high inflation in Brazil by raising the value of imported goods.